Tag Archives: Greg Grandin

Capitalism and Slavery

1 Aug

I’ve mentioned Greg Grandin’s book Empire of Necessity on this blog before. It’s basically the true story—and more!—behind Melville’s Benito Cereno, which if you haven’t read, you should read right away. And then read Greg’s book. In any event, Alex Gourevitch has a wonderful interview with Greg up today at Jacobin. It’s got all sorts of gems in it, but I thought readers here would be especially interested in this:

Scholars have long examined the ways in which slavery underwrites capitalism. I thought this story, though, allowed attention to slavery’s role in shaping not so much the social or financial dimensions of capitalism but its psychic and imaginative ones.

Capitalism is, among other things, a massive process of ego formation, the creation of modern selves, the illusion of individual autonomy, the cultivation of distinction and preference, the idea that individuals had their own moral conscience, based on individual reason and virtue. The wealth created by slavery generalized these ideals, allowing more and more people, mostly men, to imagine themselves as autonomous and integral beings, with inherent rights and self-interests not subject to the jurisdiction of others. Slavery was central to this process not just for the wealth the system created but because slaves were physical and emotional examples of what free men were not.

But there is more. That process of individuation creates a schism between inner and outer, in which self-interest, self-cultivation, and personal moral authority drive a wedge between seeming and being. Hence you have the emergence of metaphysicians like Melville, Emerson, and of course Marx, along with others, trying to figure out the relationship between depth and surface.

What I try to do in the book is demonstrate the centrality of slavery to this process, the way “free trade in blacks” takes slavery’s foundational deception, its original deceit as captured in the con the West Africans were able to play on Amasa Delano, and acts as a force multiplier. Capitalism disperses that deception into every aspect of modern life.

There’s many ways this happens. Deceit, through contraband, is absolutely key to the expansion of slavery in South America. When historians talk about the Atlantic market revolution, they are talking about capitalism. And when they are talking about capitalism, they are talking about slavery. And when they are talking about slavery, they are talking about corruption and crime. Not in a moral sense, in that the slave system was a crime against humanity. That it was. But it was also a crime in a technical sense: probably as many enslaved Africans came into South America as contraband, to avoid taxes and other lingering restrictions, as legally.

Sometimes slaves were the contraband. At other times, they were cover for the real contraband, luxury items being smuggled in from France or Great Britain, which helped cultivate the personal taste of South America’s expanding gentry class. And since one of the things capitalism is at its essence is an ongoing process to define the arbitrary line that separates “self-interest” from “corruption,” slavery was essential in creating the normative categories associated with modern society.

Queering the Strike

1 May

In The Empire of Necessity, Greg Grandin gives us a fascinating history of the phrase “to strike.” Seems like a good story for May Day.

The phrase to strike to refer to a labor stoppage comes from maritime history and is an example of how revolutionary times can redefine a word to mean its exact opposite. Through the seventeenth and much of the eighteenth century, to strike was used as a metaphor for submission, referring to the practice of captured ships dropping, or striking, their sails to their conquerors and of subordinate ships doing the same to salute their superiors. “Now Margaret / must strike her sail,” wrote William Shakespeare in Henry VI, describing an invitation extended by the “Mighty King” of France to Margaret, the weaker Queen of England, to join him at the dinner table “and learn a while to serve / where kings command.” Or as this 1712 account of a British privateer taking a Spanish man-o’war off the coast of Peru put it: “fir’d two shot over her, and then she struck,” and bowed “down to us.” But in 1768, London sailors turned the term inside out. Joining city artisans and tradesmen—weavers, hatters, sawyers, glass-grinders, and coal heavers—in the fight for better wages, they struck their sails and paralyzed the city’s commerce. They “unmanned or otherwise prevented from sailing every ship in the Thames.” From this point forward, strike meant the refusal of submission.

Not unlike how gays and lesbians owned the word “queer.”

On the death of Gabriel García Marquez

23 Apr

Greg Grandin writes in The Nation:

Born in 1927, Gabriel García Márquez was 87 when he died last week. According to his younger brother, Jaime, he had been suffering from complications caused by chemotherapy, which saved his life but accelerated his dementia, a disease that apparently ran in his family. He’d call his brother and ask to be reminded about simple things. “He has problems with his memory,” Jaime reported a few years back.

Remembering and forgetting are García Márquez’s great themes, so it would be easy to read meaning into his senility. The writer was fading into his own solitude, suffering the same fate he assigned to the inhabitants of his fictional town of Macondo, in his most famous novel, One Hundred Years of Solitude. Struck by an insomnia plague, “sinking irrevocably into the quicksand of forgetfulness,” they had to make signs telling themselves what to remember. “This is a cow. She must be milked.” “God exists.”

The climax of One Hundred Years of Solitude is famously based on a true historical event that took place shortly after García Márquez’s birth: in 1928, in the Magdalena banana zone on Colombia’s Caribbean coast, not far from where the author was born, the Colombian military opened fire on striking United Fruit Company plantation workers, killing an unknown number. In the novel, García Márquez uses this event to capture the profane fury of modern capital, so powerful it not only can dispossess land and command soldiers but control the weather. After the killing, the company’s US administrator, “Mr. Brown,” summons up an interminable whirlwind that washes away not only Macondo but any recollection of the massacre. The storm propels the reader forward toward the novel’s famous last line, where the last descendant of the Buendía family finds himself in a room reading a gypsy prophesy: everything he knew and loved would be “wiped out by the wind and exiled from the memory of men…because races condemned to one hundred years of solitude did not have a second opportunity on earth.”

It’s a powerful parable of imperialism. But the real wonder of the book is not the way it represented the past, including Colombia’s long history of violent civil war, but how it predicted the future.

One Hundred Years of Solitude first appeared in Spanish in Buenos Aires in May 1967, a moment when it was not at all clear that the forces of oblivion had the upper hand. That year, the Brazilian Paulo Freire, in exile in Chile and working with that country’s agrarian reform, published his first book, Education as the Practice of Freedom, which kicked off a revolution in pedagogy that shook Latin America’s top-down, learn-by-rote-memorization school system to its core. The armed and unarmed New Left, in Latin America and elsewhere, seemed to be in ascendance. In Chile, the Popular Unity coalition would soon elect Salvador Allende president. In Argentina, radical Peronists were on the march. Even in military-controlled Brazil, there was a thaw. Che in Bolivia still had a few months left.

In other words, the doom forecast in One Hundred Years was not at all foregone. But within just a few years of the novel’s publication, the tide, with Washington’s encouragement and Henry Kissinger’s blessing, turned. By the end of the 1970s, military regimes ruled the continent and Operation Condor was running a transnational assassination campaign. Then, in the 1980s in Central America, Washington would support genocide in Guatemala, death squads in El Salvador and homicidal “freedom fighters” in Nicaragua.

Political violence was not new to Latin America, but these counterinsurgent states executed a different kind of repression. The terror was aimed at eliminating not just opponents but also alternatives, targeting the kind of social-democratic solidarity and humanism that powered the postwar Latin American left. Hundreds of thousands of people were disappeared and an equal number tortured. Hundreds of communities were, like Macondo, wiped off the face of the earth.

It is this feverish, ideological repression, meant to instill collective amnesia, that García Márquez so uncannily anticipates in One Hundred Years. “There must have been three thousand of them,” says the novel’s lone survivor of the banana massacre, referring to the murdered strikers. “There haven’t been any dead here,” he’s told.

A year and a half after García Márquez published that dialogue, a witness to the October 2, 1968, Tlatelolco massacre in Mexico City cried, “Look at the blood… there was a massacre here!” To which a soldier replied, “Oh lady, it is obvious that you don’t know what blood is.” Hundreds of student protesters were killed or wounded that day by the Mexican military, though for years the government denied the extent of the slaughter. Even the torrential downpour in One Hundred Years is replicated at Tlatelolco: as Mexican tanks rolled in to seal off the exit streets, one witness recalls that “the drizzle turned into a storm…and I thought that now we are not going to hear the shooting.”

As a young writer, García Márquez felt constrained by the two genre options available to him: either florid, overly symbolic modernism or quaint folklorism. But Gaitán offered an alternative. Upon hearing that speech, García Márquez “understood all at once that he had gone beyond the Spanish country and was inventing a lingua franca for everyone.” García Márquez describes the style as a distinctly Latin American vernacular that, by focusing on his country’s worsening repression and rural poverty, opened a “breach” in the arid discourse of liberalism, conservatism and even Marxism.

García Márquez flung himself through that breach, developing a voice that, when fully realized in One Hundred Years, took dependency theory (a social-science argument associated with the Latin American left that held that the prosperity of the First World depended on the impoverishment of the Third) and turned it into an art form.

If Castro is autumn’s patriarch, Allende is the democratic lost in history’s labyrinth. Drawing on his by then finely tuned sense of historical existentialism, García Márquez presents Allende as a fully realized Sartrean anti-hero, alone in the presidential palace, “aged, tense and full of gloomy premonitions.” The Chilean embodied and confronted an “irreversible dialectic”: Allende’s life proved that democracy and socialism were not only compatible but that the fulfillment of the former depended on the achievement of the latter. Over the course of his political career, he was able to work though democratic institutions to lessen the misery of a majority of Chileans, bringing them into the political system, which in turn made the system more inclusive and participatory. But his life, or, rather, his death, also proved the opposite: democracy and socialism were incompatible, because those who are threatened by socialism used democratic freedoms—subverting the press, corrupting opposition parties and unions, and inflaming the military—to destroy democracy.

Read it all here, at The Nation, and then make sure to buy Grandin’s latest book The Empire of Necessity: Slavery, Freedom, and Deception in the New World—the true story behind Melville’s Benito Cereno. That old cliché about truth being stranger than fiction? There’s a reason it’s a cliché…

From the Annals of Imperial Assymetry: Greg Grandin on the Venezuelan Election

17 Apr

Latin American historian Greg Grandin is a longtime friend of the blog. He’s been one of the main voices of wisdom and sanity on Venezuela over the years, whether in The Nation, or on Charlie Rose or Up With Chris Hayes (transcript here). This morning on FB he made a quick comment on the Venezuelan election, which I’m reproducing here with his permission.

• • • • •

On November 2, 2004, George W. Bush beat John Kerry 50.7 percent to 48.3 percent. Venezuela’s foreign minister immediately (either that night or the day after) recognized the results: “we will hope that in this second mandate we can improve our relations.”

Fast forward nine years, and Nicolás Maduro beats Henrique Capriles with 50.7% of the vote and the US refuses to recognize the result. “Look, we’re just not there yet,” said a State Department spokesman (who now works for—wait for it— John Kerry). “Obviously, we have nearly half the country that had a different view. And so we’ll continue to consult, but we’re not there yet.” [Leading Nathan Newman to quip on FB: "Maybe Kerry thought Venezuela jumped the gun back then, and this is pay back."]

Mexico, Colombia, Brazil and other Latin American countries have recognized the results, but Washington’s refusal gooses the opposition, who have ransacked and burned government buildings. There have been up to seven deaths. If anyone has any doubts about the flimsiness of Capriles’ claim that he was robbed, read this post by Francisco Toro, who is as antichavista as they come.

Libertarianism in Honduras

13 Oct

My friend Greg Grandin writes on Facebook:

One of the stranger fallouts from the 2009 Honduran coup has been the scheme hatched by an NYU economist, Paul Romer, along with free-market libertarians—including Milton Friedman’s grandson, Patri; you can’t make this shit up—to start a bunch of “year-zero” cities in the country, free-market utopias with their own laws, etc. It’s like Empire’s Workshop meets The Shock Doctrine meets Fordlandia (except Henry Ford at least had his year-zero city provide free health care). If they were to come to fruition, they would be little more than free-trade maquila zones, like the kind that run along the US-Mexican border, except more savage.

In any case, the plan has hit a snag in that a committee of the Honduran Supreme Court has declared them unconstitutional, though that ruling could be reversed by the full court. Recently, a lawyer who argued for their unconstitutionality was gunned down, joining the long list of decent people killed as a result of the US-endorsed coup.

By the way, related to the discussion Corey Robin had on his blog about whether Hayek’s and Friedman’s support for dictatorships were inherent to their thought or just situational, Patri Friedman has cleared that point up, saying, in relation to these kind of start-up cities, that “Democracy is the current industry standard political system, but unfortunately it is ill-suited for a libertarian state.” Peter Thiel, founder of Paypall and bankroller of FB and another supporter of the Honduran scheme, wrote: “Most importantly, I no longer believe that freedom and democracy are compatible.” Glad that particular contradiction has gotten resolved. Adelante.

When Hayek Met Pinochet

18 Jul

 

In case you missed my five-part series on Hayek in Chile, here are the links:

  1. Hayek von Pinochet: In which we learn what our protagonist had to say about one of history’s tyrants.
  2. But wait, there’s more: Hayek von Pinochet, Part 2: In which we learn what our protagonist had to say about South Africa and what Ludwig von Mises had to say about fascism.
  3. Friedrich del Mar: In which we ask the question: Did Hayek make the decision to convene a meeting of the Mont Pelerin Society in Viña del Mar?
  4. The Road to Viña del Mar: In which we answer the question: Did Hayek make the decision to convene a meeting of the Mont Pelerin Society in Viña del Mar?
  5. Viña del Mar: A Veritable International of the Free-Market Counterrevolution: In which we learn what Hayek’s associates had to say about Pinochet’s Chile and its lessons for Reagan’s America.

Or, as the song says:

When an irresistible force such as you
Meets and old immovable object like me
You can bet as sure as you live
Something’s gotta give, something’s gotta give,
Something’s gotta give.

When an irrepressible smile such as yours
Warms an old implacable heart such as mine
Don’t say no because I insist.
Somewhere, somehow,
Someone’s gonna be kissed.

So en garde who knows what the fates have in store
From their vast mysterious sky?
I’ll try hard ignoring those lips I adore
But how long can anyone try?

Fight, fight, fight, fight, fight it with all of our might,
Chances are some heavenly star spangled night
We’ll find out as sure as we live
Something’s gotta give, something’s gotta give,
Something’s gotta give.

Postscript: Jesse Walker, an editor at Reason, is one of the few libertarians to grapple with some of this material. Have a read. And, in case you missed it, here’s Greg Grandin on Allende, explaining what the right thought was so dangerous about the democratically elected Marxist president of Chile.

Friedrich Del Mar*: More on Hayek, Pinochet, and Chile

11 Jul

In my first post about Hayek and Pinochet, I quoted a statement that I had written in the Nation in 2009 and had repeated in my book The Reactionary Mind:

Hayek admired Pinochet’s Chile so much that he decided to hold a meeting of his Mont Pelerin Society in Viña del Mar, the seaside resort where the coup against Allende was planned.

The Mont Pelerin Society (MPS) was a group of intellectuals and activists that Hayek helped found after World War II to advance the cause of the free market. In recent years, it has become the subject of some great new scholarship; judging by the fall catalogs it looks likely to be an even hotter topic in the future. Hayek was president of the MPS from 1947 to 1961 and honorary president after that.

I had learned about the meeting in Viña—and Hayek’s role therein—from Naomi Klein and Greg Grandin.

Once my Hayek von Pinochet post came out, a Hayek enthusiast began questioning—among other things—my claim about Hayek’s role in the Viña meeting on Twitter.

Truth is: this was the first time I had heard anyone question the claim about Hayek and Viña, but I decided to follow it up.

I emailed a past president of the MPS, who informed me that a regional meeting such as this one would have been proposed by local members of the Society to the Board, which would have had to have given its approval. My informant wasn’t sure if Hayek was on the board in 1981—honorary presidents, he said, weren’t usually on the board—and he also told me that the Chileans to whom I might pose some questions were “not around.”

So far, so nothing. I emailed a few scholars about the meeting, but didn’t hear back from them.

Then I stumbled across this 1979 letter from Hayek to Joaquin Reig, an MPS regular from Spain who wanted to organize a regional meeting in Madrid. In the letter, Hayek makes plain his preferences for the meeting’s location:

I believe I mentioned to you that I would rather like to have the meeting take place at Salamanca, but that may be, as you pointed out, impracticable. But I want still strongly to urge that we have there a one day public meeting entirely devoted to “The Spanish Origins of Economic Liberalism!”

For several years, Hayek had been growing increasingly excited about the possibility that “the basic principles of the theory of the competitive market were worked out by the Spanish scholastics of the 16th century.” For reasons still obscure to me, he seemed positively ecstatic about the notion that “economic liberalism was not designed by the Calvinists but by the Spanish jesuits.” (In his History of Economic Analysis, Schumpeter also had argued “that the very high level of Spanish sixteenth-century economics was due chiefly to the scholastic contributions.” But it didn’t seem to transport him in the way it did Hayek.)

Hayek insisted that the conference be shipped for a day 132 miles northwest of Madrid in order “to celebrate at Salamanca”—the university town where this specific branch of early modern natural law theory was formulated—”the Spanish origins of liberal economics.”

He got his way: the MPS members dutifully got into their buses and, like medieval penitents following their shepherd, made their pilgrimage to the birthplace of free-market economics. According to one participant:

A particular memory was of a small group accompanying Hayek descending from the newer Gothic Cathedral down a circular stairs to the older Romanesque Cathedral and encountering a small group accompanying Lord Lionel Robbins ascending the stairway. Hayek and Robbins engaged in a conversation, and then the respective parties continued their tours of the cathedrals.

Clearly, whether he was in or out of office, Hayek’s voice held sway at the Society.

But still no word on Hayek and Viña.

Then earlier today I got a copy of this cache of documents, the originals of which are housed in the archives at the Hoover Institution at Stanford, where the papers of both Hayek and the MPS reside.

The documents don’t establish who came up with the idea—or initiated the effort—of holding the 1981 MPS meeting at Viña.  An announcement stamped December 1980 merely states:

At a recent General Meeting at the Hoover Institution, our Society decided to hold a Regional meeting in Chile in November of 1981. Preliminary arrangements have already been made for this Meeting with the cooperation of distinguished economists and business leaders of the country.

In regard to those arrangements our President Dr. Chiaki Nishiyama has approved the nomination of an Executive Committee for the Regional Meeting, made up as follows: Paulo Ayres (Brazil), Ramón Díaz (Uruguay), Alberto Benegas Lynch Jr. (Argentine[sic]), Carlos Cáceres (Chile) and Pedro Ilbáñez (Chile) as President; Hernán Cortes acting as the Committee’s Secretary.

Hayek’s name appears nowhere on this announcement—except on the letterhead (“Honorary President”). The announcement does add that “leading Members of Mont Pelerin are assiting [sic] us in organizing the meeting, deciding on the programme and inviting the main speakers and discussants.” But it doesn’t specify who those leading members are.

But then I found this follow-up announcement, dated June 1981:

Final arrangements for the event were approved at a recent meeting of the Executive Committee for the Regional meeting attended by our President Dr. Chiaki Nishiyama and our Honorary President, Professor Friedrich von Hayek.

So it seems that Hayek did attend the meeting that approved the “final arrangements” for the Viña conference. So much for the Hayek enthusiast who also had tweeted at me:

Whether Hayek formally voted at that meeting or not remains unclear. Given his interventions two years earlier in the Salamanca affair, however, it’s hard to conclude that he didn’t play a significant role. At a minimum, he didn’t veto the meeting place, which he could easily have done. And he most likely had a hand in those final arrangements, which included the adoption of a program and a tentative list of speakers.

The list is of interest in its own right. It’s a veritable who’s who of mid- to late-century conservatism and libertarianism: William F. Buckley (on “Freedom of Expression and Misinformation of the Western World”); George Gordon Tullock and George Stigler (on “Decentralization and Municipal Autonomy”); James Buchanan (“Direct or Indirect Taxation. New Approach to Taxation Policies”); Martin Anderson (“Social Security, A Road to Socialism?”), with Thomas Sowell as a discussant; Irving Kristol (“Ethics and Capitalism”); Milton Friedman (“Monetary System for a Free Society”); and Friedrich von Hayek (“Democracy, Limited or Unlimited?”)

In the end, several of these tentative’s,  including Hayek and Buckley, proved to be no’s. On the final agenda, however, some new names appeared. One of them was Gary Becker—with a “t” next to his name. Tentative.

In the last few months, I’ve been engaged in an ongoing battle with the libertarians about their lack of interest in workplace freedom. The operating assumption of those conversations seems to be that however indifferent libertarians are to coercion in the private sphere, when it comes to the state, they’re the real deal. Yet here we have some of the leading lights and influences of the movement —Tullock and Buchanan were listed as “confirmed” speakers; not sure yet what happened with Becker—convening in the very place where the Pinochet regime launched its bloody rule.

There is a large discourse on the left of intellectuals and activists trying to come to terms with their erstwhile support for Stalinism and revolutionary tyranny. Indeed, a great deal of 20th century intellectual history is driven by that discourse, with entire literatures devoted to the Webbs in Russia, Sontag in Vietnam, Foucault in Iran. Yet where is the comparable discourse on the right of intellectuals coming to terms with their (or their heroes’) support for Pinochet, Salazar, and the like? With the exception of John Gray, I can’t think of a single apostate from—or adherent of—the right who’s engaged in such a project of self-examination: not breast-beating or mea culpas, but really looking at the relationship between their ideas and their actions. Now there’s a road to serfdom that’s yet to be mapped.

I’ve now ordered a whole bunch of additional documents from the Hoover Institute.  I’ll keep you posted on what I find. In the meantime…

* The title of this blog comes from Tim Barker.

 

Update (12:15 pm)

Because sharp and smart readers like Kevin Vallier have misinterpreted this, I wanted to clarify something about my post.  In bringing up the Salamanca story, I was not trying to make the case that there was any connection between Hayek’s interest in Spanish Scholasticism and his support for Pinochet. I was trying to establish a very different point: despite not being the head of the Mont Pelerin Society, Hayek could and did intervene in decisions about where its regional meetings were held.  Sorry if that was unclear.

Hayek von Pinochet

8 Jul

It’s no secret that Friedrich von Hayek was a warm supporter of Augusto Pinochet’s bloody regime. As I wrote in The Nation a few years back:

Hayek admired Pinochet’s Chile so much that he decided to hold a meeting of his Mont Pelerin Society in Viña del Mar, the seaside resort where the coup against Allende was planned. In 1978 he wrote to the London Times that he had “not been able to find a single person even in much maligned Chile who did not agree that personal freedom was much greater under Pinochet than it had been under Allende.”

Greg Grandin, Naomi Klein, Brad DeLong, John Quiggin (twice), and Michael Lind also have written about the Hayek-Pinochet connection.

By contrast, Alan Ebenstein, Hayek’s biographer (sympathetic doesn’t quite capture the tone), does not mention the connection at all. Ebenstein does, however, quote Hayek making the rather astonishing claim in 1981 that there were not “any totalitarian governments in Latin America. The only one was Chile under Allende.”

I had thought there wasn’t much more to say about Hayek in Chile, but a new article in the American Journal of Economics and Sociology—”Preventing the ‘Abuses’ of Democracy: Hayek, the ‘Military Usurper’ and Transitional Dictatorship in Chile?” by Andrew Farrant, Edward McPhail, and Sebastian Berger—provides some fresh details.

Here is just a taste:

For instance, Hayek—writing to The Times in 1978 and explicitly invoking Pinochet by name—noted that under certain “historical circumstances,” an authoritarian government may prove especially conducive to the long-run preservation of liberty: There are “many instances of authoritarian governments under which personal liberty was safer than under many democracies.”

[Hayek] noted that if “Strauss (who I met during a reception in Chile briefly)” had been “attacked for his support for Chile he deserves to be congratulated for his courage.” [Franz Josef Strauss was a right-wing German politician, who had visited Chile in 1977 and met with Pinochet. His views were roundly repudiated by both the Social Democrats and the Christian Democrats in Germany. Hayek apparently wanted to help Strauss become chancellor of Germany.]

Though Hayek’s 1981 interviews with El Mercurio have attracted much attention, scholars have ignored El Mercurio’s coverage of Hayek’s initial visit to Chile in 1977. In particular, El Mercurio notes that Hayek—quoted as saying that Chile’s efforts to develop and reform its economy provided “an example at the global level” (1977: 27)—had met with Pinochet: “At the end of his visit . . . Hayek . . . was received by President Augusto Pinochet. He [Hayek] told reporters that he talked to Pinochet about the issue of limited democracy and representative government. . . . He said that in his writings he showed that unlimited democracy does not work because it creates forces that in the end destroy democracy. He said that the head of state listened carefully and that he had asked him to provide him with the documents he had written on this issue.”

According to Hayek, Pinochet had requested copies of Hayek’s writings (“documents”) explaining why unlimited democracy would inevitably lead to the destruction of democracy (1977). Consequently, Hayek asked Charlotte Cubitt (his secretary from February 1977 until his death in 1992) to send Pinochet a draft of Hayek’s ‘A Model Constitution’ (Cubitt 2006: 19). Importantly, Hayek’s chapter—‘A Model Constitution’ (1979b: 105–127)—provides a three-page discussion of the conditions under which the adoption of Emergency Powers (124–126) and the suspension of democracy are supposedly justified: The “basic principle of a free society . . . [“the coercive powers of government are restricted to the enforcement of universal rules of just conduct”] . . . may . . . have to be temporarily suspended when the  long-run preservation of that order [the free society] is itself threatened” (1979b: 124).

When Hayek visited Chile in 1981 he “took time off from his official commitments to walk around and see for himself whether people were cheerful and content. He told me that it was the sight of many sturdy and healthy children that had convinced him.”

As Hayek notes, “democracy needs ‘a good cleaning’ by strong governments.”

The Pinochet junta “enacted a new constitution in September 1980. . . . The constitution was not only named after Hayek’s book The Constitution of Liberty, but also incorporated significant elements of Hayek’s thinking.”

Farrant et al demonstrate that Hayek’s support of Pinochet was not contingent or begrudging—an alliance of convenience due to Pinochet’s embrace of free market economics—but was rather the product of two longstanding ideas and commitments.

First, a belief that welfare/socialist states of modern democracies have a tendency toward totalitarianism. This has been the subject of some debate over at Crooked Timber, but Farrant et al show just how consistently Hayek held this belief throughout his career: from The Road to Serfdom to volume 3 of Law, Legislation and Liberty, in which he describes his “growing apprehension about the direction in which the political order of what used to be regarded as the most advanced countries is tending” and his “growing conviction, for which the book gives the reasons, that this threatening development towards a totalitarian state is made inevitable by certain deeply entrenched defects of construction of the generally accepted type of ‘democratic’ government.” As Hayek put it in a 1981 interview with Renee Sallas of El Mercurio: “All movements in the direction of socialism, in the direction of centralized planning, involve the loss of personal freedom and end up ultimately in totalitarianism.”

In his defense of Pinochet (and elsewhere), Hayek invokes the oft-repeated distinction between totalitarian and authoritarian societies, and though Farrant et al don’t mention this, it struck me that this old saw—so beloved of figures like Jeanne Kirkpatrick—might have served as some of the glue holding together neoconservatives like Kirkpatrick and neoliberals like Hayek, especially in the 1970s.

Second, a belief in the virtues of temporary dictatorships as a means of saving these totalitarian-bound democracies from themselves. In 1981, Hayek told Sallas:

[A]s long-term institutions, I am totally against dictatorships. But a dictatorship may be a necessary system for a transitional period. At times it is necessary for a country to have, for a time, some form or other of dictatorial power. As you will understand, it is possible for a dictator to govern in a liberal way. And it is also possible for a democracy to govern with a total lack of liberalism. Personally, I prefer a liberal dictator to democratic government lacking in liberalism. My personal impression. . . is that in Chile . . . we will witness a transition from a dictatorial government to a liberal government . . . during this transition it may be necessary to maintain certain dictatorial powers, not as something permanent, but as a temporary arrangement.

While critics have cited this quotation before, Farrant et al note that Hayek had been offering similar encomia to Portuguese dictator António de Oliveira Salazar as early as 1962.

Interestingly enough, Hayek had sent Salazar a copy of Hayek’s The Constitution of Liberty (1960) in 1962 and Hayek’s accompanying note to Salazar is particularly revealing: Hayek hopes that his book—this “preliminary sketch of new constitutional principles”—“may assist” Salazar “in his endeavour to design a constitution which is proof against the abuses of democracy.”

Unlike most defenses of temporary dictatorship, Hayek’s was not framed around a foreign threat to the security of the state or a domestic insurrection (though he does offer a brief discussion of “emergency powers” in such situations in Volume 3 of Law, Legislation and Liberty); his was explicitly designed to countermand the creeping tyranny of social democracy. If the visions of Gunnar Myrdal and John Kenneth Galbraith were realized, he wrote in Volume 3 of Law, Legislation, and Liberty, social democracy would produce “a wholly rigid economic structure which…only the force of some dictatorial power could break.” Dictatorship, as he put it in his El Mercurio interview, was “a means of establishing a stable democracy and liberty, clean of impurities.”

As Farrant et al note, Hayek’s faith in the stewardship of good dictators flies in the face of his own warnings against trusting in the good intentions of government bureaucrats—not to mention his admonitions against an earlier generation of liberals and leftists, who were prepared to accept the allegedly temporary dictatorship of the Bolsheviks as a way station to the future.

Indeed, Hayek (1948: 207) took H. D. Dickinson—one of his opponents in the interwar socialist calculation debate—to task for defending the supposedly naive idea of a ‘transitional’ socialist dictatorship. Dickinson—like Hayek tellingly invoking the example of Oliver Cromwell—had argued that “[d]uring the . . . transition from a capitalist to a socialist society . . . [economic and political] liberty may be abridged, just as during the early phases of the struggles which made possible . . . political liberty those very liberties were temporarily eclipsed . . . Cromwell and Robespierre ruled arbitrarily, yet the ultimate influence of their rule was to establish civil liberty…. [Although] Lenin and Stalin have shown scant respect for the preferences of the . . . consumer . . . if they shall have been the means of establishing a classless society, their ultimate influence will be for economic liberty. After a socialist order has been safely established, the raison d’être of restrictions on liberty will have ceased” (Dickinson 1939: 235–236). As Hayek tartly noted, any adoption of transitional socialist dictatorship would more likely culminate in a permanent regime akin to that of Hitler or Stalin than in the “beautiful and idyllic picture . . . of ‘libertarian socialism’” painted by Dickinson (Hayek 1948: 207). Much the same criticism, however, can be readily leveled against the best case (or implicitly maximax) assumptions underlying the giant leap of faith that is implicit in Hayek’s own defense of transitional dictatorship.

But, it seems to me, in the course of defending Pinochet and Salazar—and the whole idea of temporary dictatorship— Hayek was prepared to entertain an even deeper betrayal of his own stated beliefs. As he said to Sallas in 1981, when any “government is in a situation of rupture, and there are no recognized rules, rules have to be created.” That is what a dictator does: create the rules of social and political life. (Again, Hayek is not referring to a situation of civil war or anarchy; he’s talking about a social democracy in which the government pursues “the mirage of social justice” through administrative and increasingly discretionary means.)

Yet Hayek is famous—arguably most famous—for his notion that the rules of social order are neither known nor made; they are tacit and inherited. As he argued in Volume 1 of Law, Legislation and Liberty:

The first of these attributes which most rules of conduct originally possessed is that they are observed in action without being known to the acting person in articulated (‘verbalized’ or explicit) form. They will manifest themselves in a regularity of action which can be explicitly described, but this regularity of action is not the result of acting persons being capable of thus stating them. The second is that such rules come to be observed because in fact they give the group in which they are practised superior strength, and not because this effect is known to those who are guided by them. Although such rules come to be generally accepted because their observation produces certain consequences, they are not observed with the intention of producing those consequences—consequences which the acting person need not know.

Hayek was hardly the first conservative intellectual to write paeans to the slow accumulated wisdom of the ages by day, only to  praise Jacobin interventions of the right by night. Edmund Burke, I’ve argued, did much the same thing. Hayek even went so far as to defend his preferred brand of politics as a kind of dogmatic utopianism.

A successful defence of freedom must therefore be dogmatic and make no concessions to expediency.

Utopia, like ideology, is a bad word today…But an ideal picture of a society which may not be wholly achievable, or a guiding conception of the overall order to be aimed at, is nevertheless not only the indispensable precondition of any rational policy, but also the chief contribution that science can make to the solution of the problems of practical policy.

How one squares Hayek’s praise of dictatorship with his conception of a spontaneous order, I’m not yet sure. But with his vision of an unmoved mover knowingly and forcibly creating rules, by design, from a lawless firmament (not to mention his conception of democratic drift), Hayek puts himself within the orbit of Carl Schmitt, with whom he maintained a running dialogue, and who famously described the moment when a new order is brought into being—a new order of rules and routines—as a “an absolute decision created out of nothingness,” as the moment when “the power of real life breaks through the crust of a mechanism [the democratic state] that has become torpid by repetition.”

Update (July 11, 10 am)

Here’s a pdf of the piece by Farrant et al.

Black Money: On Marxism and Corruption

4 Mar

En route with my daughter to the Purim Carnival, I stopped at my friends Greg and Manu‘s house. Manu’s mother Toshi is visiting from India, and we got to talking about corruption scandals there. Specifically, what people do with money they’ve gotten illegally. Toshi called it “black money”—a phrase I hadn’t heard before. Turns out, it’s a fairly common term.  Here’s one definition:

Proceeds, usually received in cash, from underground economic activity. Black money is earned through illegal activity and, as such, is not taxed. Recipients of black money must hide it, spend it only in the underground economy, or attempt to give it the appearance of legitimacy through illegal money laundering.

Talking about the kind of hoarding people engage in when they have black money—think of the wads of cash you see in Mafia movies—it occurred to me that corruption stands the Marxist theory of capitalism on its head. Or at least two parts of it.

But before I explain how, caveat lector: What follows is the speculation of an amateur. I’ve done no research on corruption, and the Marx I know is the Marx I teach. That is to say, beyond the incidental mention or allusion, I’ve never written about Marx or Marxism, and beyond some secondary reading, I’ve not done any research on Marx or Marxism.

So why do people hoard black money? For the obvious reason that they can’t deposit it in a bank, invest it, or use it for any kind of legal or illegal transaction that would bring it to the attention of the government.

This makes the person who deals in black money similar to a miser, and for Marx, the miser in a capitalist economy is an irrational actor. The proper way to make and accumulate money under capitalism is to put the money one has into circulation. In its simplest form, someone uses money M to buy commodity C and then sells commodity C at a higher price to someone else (Marx’s famous M—C—M′ circuit). As Marx writes in chapter 4 of Capital, Volume One, “It is this movement that converts it [the original money one had and then advances] into capital.”

Movement, or circulation, is the key to profit in capitalism. Where the process of satisfying one’s wants or desires has a discrete terminus—ending with the consumption or use of the desired object—the increase of profit, which depends on circulation, does not. “The circulation of money as capital is, on the contrary, an end in itself, for the expansion of value takes place only within this constantly renewed movement.”

The miser, by contrast, operates under the delusion—though it’s only a delusion under capitalism—that the best way to increase his wealth is by taking his money out of circulation, hoarding it in a mattress or under the floor. Like the capitalist, he’s engaged in an endless quest for more money. And while he’s often represented in literature as mad—possessed by some malignant daemon, driven by some unfathomable end—Marx makes the point that his madness is purely situational, a failure to match his ends with his means. Unlike the capitalist, who shares the same goal of increasing his money, the miser simply doesn’t understand that best way to make money in a capitalist economy is to spend it.

This boundless greed after riches, this passionate chase after exchange-value, is common to the capitalist and the miser; but while the miser is merely a capitalist gone mad, the capitalist is a rational miser. The never-ending augmentation of exchange value, which the miser strives after, by seeking to save his money from circulation, is attained by the more acute capitalist, by constantly throwing it afresh into circulation.

In corruption rings, men and women are as rational as any capitalist, but they’re forced to act with all the madness of a miser. That is, like the capitalist, they correctly estimate their situation, but their situation, unlike that of the capitalist, requires that they hoard. Even if they were to launder their money, which would put their sums into a kind of circulation, that circulation would not do what circulation does under capitalism: it might make their illicit funds clean, but it wouldn’t increase those funds.

There’s a second way in which corruption turns the Marxist theory of capitalism on its head. In his early “humanist” writings, specifically the Economic and Philosophical Manuscripts, Marx was obsessed with the ways in which money and its pursuit distorted men and women. We pursue money in order to possess something, but ultimately money possesses us. It turns our weaknesses into strengths, our assets into liabilities. It makes us into what we are not, and makes what we are not into who we are.

The extent of the power of money is the extent of my power. Money’s properties are my properties and essential powers—the properties and powers of its possessor. Thus, what I am and am capable of is by no means determined by my individuality. I am ugly, but I can buy for myself the most beautiful of women. Therefore I am not ugly, for the effect of ugliness—its deterrent power—is nullified by money….I am stupid, but money is the real mind of all things and how then should its possessor be stupid? Besides, he can buy talented people for himself, and is he who has power over talented people not more talented than the talented? Do not I, who thanks to money am capable of all that the human heart longs for, possess all human capacities? Does not my money therefore transform all my incapacities into their contrary?

Marx called this power of money to turn “fidelity into infidelity, love into hate, hate into love, virtue into vice, vice into virtue, servant into master, master into servant, idiocy into intelligence and intelligence into idiocy” the “fraternization of impossibilities.”

Money, in other words, constituted a profound form, or instrument, of untruth. It was the ultimate deceiver, the greatest liar, for it had the capacity to transform that which is into that which isn’t and vice versa.

In the case of corruption, however, money is the great instrument of truth, at least potentially. It is the most tangible sign of some ill-gotten gain, of some illicit or criminal activity. That is why its possessor must go to such lengths to hide it by hoarding or laundering it.

The possessor of black money has something for which he cannot account, at least not legally. If he deposits it in a bank, the government will ask how he came by it, and that is a question he cannot—or does not want to—answer. The law of equivalence in monetary exchange—the rule that for every dollar I possess someone has to have given up one dollar—ensures that the truth will out (a phrase, perhaps not coincidentally, deriving from a play obsessed with money and its equivalences). The equivalences that money engineers, which Marx saw as so much mystification, become in corruption scandals the sources of demystification. The M—C—M′ circuit, which Marx treats as a sign of an almost ontological disorder, a cosmic diremption, becomes, in the case of corruption, the sign, the guideposts, by which order is restored.

Skeptics will point out that Marx is talking about capitalism, not corruption (though it’s clear in his early writings that he sees capitalism as a mode of corruption, at least in the literal sense of the term).  But as Manu pointed out, corruption and neoliberalism—the ur form of capitalism—often go hand in hand. While corruption certainly preceded neoliberalism, it’s also part of the everyday life of neoliberalism.

In fact, one can posit an interesting relationship between neoliberalism and corruption. On the one hand, prior to the onset of neoliberal regimes, corruption is often used to justify the push toward privatization and marketization, on the assumption that the free market would not allow for the kinds of shenanigans that a state-run economy encourages and fosters. (Just think how the classic films about corruption—On the Waterfront, Serpico, Chinatown—color our view of institutions like labor unions and the state; one wonders if such films, particularly the later ones, didn’t ultimately have something to do with the conservative turn of the 1970s.) On the other hand, the loss of state-provided resources that neoliberalism entails often push men and women to make up for that loss through corruption. That, it certainly seems, is what’s happening throughout so much of the world where the state has been downsized.

As Manu also pointed out—this, I think, is an especially acute insight—the hoarding practices of corruption mimic an earlier mode of capitalism, mercantilism, where accumulation and wealth are achieved not through circulation but through stockpiling. I’m not sure where we want to go with that, but it does suggest something I’ve mused on before: neoliberalism doesn’t represent a great leap forward so much as a great leap backward.

So, some questions for you readers:

  1. Are there Marxist theories of or writings about corruption? What are the best ones?
  2. What kind of theorizations have there been about the relationship between neoliberalism and corruption? Am I right—remember, I’m just a piker on these matters—that there’s relationship between the two, or at least that there’s been an uptick with the shift to neoliberalism?
  3. This seems like the kind of thing David Graeber would have a lot of smart things to say about. Has he? (Haven’t read Debt or most of his other writings.)
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